A recent letter to the editor addressed the ongoing debate over capital gains tax (CGT) policy in the United Kingdom, cautioning against proposed increases. Gregory Shenkman, writing from London, argued that raising CGT would be counterproductive to the country's economic growth and overall tax revenue.

Shenkman criticized advice from entrepreneur Dale Vince, suggesting Vince’s views on CGT lack credibility due to his unconventional career path. The letter emphasized that entrepreneurs and business owners assume risks over time when investing in assets, a factor that distinguishes capital gains from regular income and justifies the traditionally lower CGT rate.

The letter underscored that CGT rates are set lower than income tax partly because they account for the impact of inflation on long-held assets and the risks associated with business ventures. Shenkman warned that increasing CGT rates could diminish economic activity, thereby reducing rather than increasing government tax revenues.

This perspective comes amid discussions involving Andy Burnham and the Labour Party, who reportedly support raising CGT to enhance government revenue. Shenkman’s response reflects a broader concern among some economists and business figures that higher capital gains taxes could discourage investment and entrepreneurial risk-taking, which are vital drivers of economic growth.

The debate highlights the divergent views on balancing tax policy to ensure fair revenue without stifling business activity. While some advocate for increased CGT as a means to raise funds and address inequality, others warn of potential negative impacts on investment incentives and economic expansion.